GBP/USD advances to fresh daily highs near 1.2850

• BoE’s Bailey says more evidence on coronavirus is needed before policy action.
• US Dollar Index looks to snap four-day losing streak.
• Employment in US’ private sector increased more than expected in February.

The GBP/USD pair spent a large portion of the day moving in a tight range near the 1.2800 handle before gaining traction during the American trading hours. As of writing, the pair was trading at 1.2845, adding 0.28% on a daily basis.

Bailey pours cold water on BoE rate cut expectations

Following the Federal Reserve’s surprising 50 basis points rate cut on Tuesday, markets’ focus shifted to other central banks for similar action. However, while testifying before the UK’s Treasury Committee on Wednesday, incoming Bank of England Governor Andrew Bailey said that they need more evidence on coronavirus before making a policy decision. 

“We need to think of rebalancing so that fiscal policy has more of a role to play,” Bailey added to suggest that the BoE is unlikely to make an aggressive policy move like the Fed and provided a boost to the GBP.

On the other hand, the greenback is staying relatively strong against its major rivals on Wednesday supported by the upbeat data and the US Dollar Index clinging to daily gains near the 97.50 handle.

Earlier in the day, the data published by the ADP showed that the Employment Change in the private sector in February was +183,000, higher than the market expectation of 170,000. Additionally, the ISM’s Non-Manufacturing PMI rose to 55.6 in February to show expansion in the service sector’s business activity at a strong pace. 

Technical levels to watch for